Many wonder if there is any point to getting pre-approvals. But there are very good reasons to get this out of the way early in the process.
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PODCAST TRASCRIPT:
I thought I'd give you an update on pre-approvals and their validity in the current market. I think lots of people think - what's the point of getting a preapproval? Do they really assist? How can I take advantage of one?

We actively encourage all of our potential buyers, whether it's an upgrade or a first home buyer, an investor, no matter what stage, even a superfund who we know is going to access those funds, to get a pre-approval in place. Why do we do that? One of the key reasons is if you can do all of the work now, there's a lot to sort out through a property portfolio. The emotions are running if you're looking to buy your first home and things like that. Let us take one of the stresses out up front before you get to that stage.

By arranging a pre-approval, we've done all your credit checks, we've validated your ability to borrow, we've got bank support, subject simply to the property being found, we've done the work and the hard yards before hand. The real benefit I see in having a preapproval is if you're going to a private sale and you're negotiating and there's one potential owner or buyer that is umming and ah-ing and they want to do it subject to finance and you're not subject to finance, as a vendor or a seller, which offer would you rather take?

They might be the exact same amount. In fact, we've got plenty of experience with our clients having had an offer acceptance slightly lower than what the other people were willing to take but because they were unconditional, they were able to take that property off the market and take it off those potential purchase who were willing to pay a bit more but didn't have their finance in order.

The other great thing, as everyone knows in the cut and thrust of buying a property, whether you're doing it yourself or employing a buyers advocate to do it, there's a little bit of toing and froing over terms and negotiations and things like that. By having your preapproval already completed and having done most of the work up front, you can negotiate a shorter settlement term.

That might mean the difference between saving you $5,000, $10,000 maybe $20,000 in the actual price because the vendor might have a need to get a quick settlement, a 30 day settlement. By being able to negotiate on terms you may not necessarily have to negotiate on price or it might give you a really great tool to be able to do that. I think there are some great opportunities by doing a preapproval upfront.

We actively work with our clients. We have access to RP data tools and things like that so we can do property reports on. We have access to some great buyer's agent's networks that we can give clients a hand by using our professional network to be able to go out into the market. By having that preapproval in place it means an advocate, an agent or you know yourself, you can negotiate with confidence that you both our support at Intuitive Finance and, of course, the banks support behind you, up to that certain limit.

I think pre-approvals are now a vital opportunity to take advantage in the current hot property market with low interest rates and things like that. I think a pre-approval for anyone looking to buy a property whether it be your first home, upgrading your home or an investment property, I see preapproval as a vital stage of your whole buying process.

Of course, here at Intuitive Finance we'd love to be able to help you with that. If you're looking through the market and get a preapproval because you're at one of those stages, please contact us here at www.intuitivefinance.com.